Orcas Times

Happy Fall!

Everything’s jumping here this fall on Orcas Island. Just reading the first paragraph of Sandi’s Real Estate Update will tell you why! And Beth’s Best Buys will pique your interest even further.

We’re proud to introduce Cory Harrington, who’s serving as real estate assistant and permit consultant. Be sure to read Teri’s County Update, where you’ll learn the latest about the Shoreline Master Plan and the Eastsound Subarea Plan.

Thanks to Marlis for compiling a comprehensive list of events coming up in the next two months. Mark your calendars! And in Teri Talk, I explore “You Know It’s Fall on Orcas When…” in a picture story.

As always, feel free to drop me a line to let me know what’s on your mind. I love to hear from you!

Smiles to you all,Teri Williams

Orcas Island Fall Real Estate Update

“So how’s the island’s real estate market these days?” After a series of quarters of being cautiously optimistic about a recovery, I can finally, officially, respond to the number one question I get asked with an answer a lot of people have been waiting to hear: Our local real estate market is BOOMING.

A dwindling number of foreclosures, recovering values, strong regional economic growth and pent up demand have rocketed our current pace of home sales to levels far above what they were a decade ago, pre-crash.

Right now, sellers with appropriately priced properties are having little trouble finding buyers and closing deals within a reasonable time frame.

The market is so active that we’re running out of homes in the most sought after price range: For homes under $400k, there’s less than two month’s inventory!

Fast and Furious (For Us)

So far this year, we’re selling an average of 13 homes per month. That might not seem like very many, but for our sleepy little island, that’s an impressive 30% increase over last year’s sales rate.

We’re not only selling more of them, but homes are also selling faster than ever. Gone are the days when even motivated sellers had to be prepared to see their island listings languish on the market for a year or more. The median time on market for a home has dropped to just 75 days. Desirable homes in the lower price sweet spots often sell in less than 30 days.

Seventy-five percent of Orcas home sales were closed at $600K or below. Higher end homes, especially $1mm and above, still take significantly longer to sell due to the lower demand. Only seven homes over $1mm sold in the first three quarters of 2015. At this rate we have more than a four year’s supply of high-priced estates.

Regardless of price range, there’s still a clear message on proper pricing: The higher a home is listed above market value, the longer it takes to sell. Once they’re priced correctly, though, the value holds up, with this year’s home sales going for a median of 96% of their final list price. The caveat there is “final list price.” Nearly 40% of those sales required at least one price drop before attracting a buyer.

The median price of a home on Orcas has increased to $385,000. Burning through the glut of foreclosures has been a big help in buoying values. Foreclosures made up at least 15% of sales in recent years, but in 2015 it’s down to less than 10%. Currently there is only one bank-owned property on the market.

Fuzzy Assessments

Most homes are selling for more than their tax assessed value: the current median is 115%. But don’t even think of using that as a formula for coming up with a true market value. For 2015 sales, selling prices ranged from 58% to 197% of the assessed value! As always, the best way to determine your property’s market value is to rely on an experienced island Realtor.

Landing Some Big Ones

We’re also seeing a bit of a land rush on Orcas Island, with a whopping 46% increase in sales of vacant parcels. Our 27-month inventory has been whittled down to an 18 month’s supply. The vast majority of land sales are for pieces under $300k-the median is $125k-but we’ve seen a few sales of choice acreage garnering over $800k.

Despite the improvement, the volume of land sales is still far below the levels from the height of the market back in 2005/6. The cost of new construction remains high and it’s difficult to make the numbers pencil out when compared to the current affordability of existing homes. Still, for those buyers who aren’t at the move-in stage, securing raw land now while prices are low can get them one step closer to their future island dream home.

Pricing Points

All of the data suggests that values should be climbing. So…are they? Yes, but so slowly it’s almost imperceptible. It’s frustrating for many sellers on the island who hear about real estate bidding wars on the mainland. Why hasn’t that translated to a sharp increase in prices here? I have a few theories on this.

We still have a large inventory in the higher price ranges. This keeps price pressure on the levels below.

We’re primarily a second home market. People don’t have to buy here. Although this was also the case during the 2005/6 boom, the devastating 2008 market crash and subsequent loss of equity is still fresh on everyone’s minds. Buyers are more cautious these days and they’re driving hard bargains. Many lost buying power during the Great Recession and need to conserve their remaining nest egg.

Buyers, Realtors and appraisers must use recent comparable sales to determine market value. Since we rarely have competing buyers bidding against each other and driving up prices, benchmark values tend to rise slowly.

When there are multiple buyers, the property is likely in the sub-$400k range and those buyers are typically maxed out at what they can spend. This segment of buyers is primarily made up of local working folks on a budget and investors needing to hold the line for positive cash flow and appreciation. These kinds of bidders have a definite ceiling, so prices for even the most desirable properties will rise at a measured pace as opposed to leaps and bounds.

The good news is that the San Juan Islands market does follow the Seattle market trends, albeit with a delay. The region’s tech sector is booming, bringing lots of high-paying jobs and interest rates remain near historic lows. With Orcas Island well known as one of the West Coast’s most coveted location for second homes, I’m confident that our real estate market will continue its upward trend for the foreseeable future.

Company News

Cory grew up on Orcas Island and attended grades K-12 at Orcas Island Elementary School, Middle School, and High School. There he participated in education, sports, travel clubs and other extra-curricular activities.

In 2003 Cory left Orcas to pursue an education in music production, studio recording, and live sound reinforcement. After completing a degree in recording arts, he gained internship and employment with Production Resource Group, a concert production company in Las Vegas. During his 13 years of employment at PRG, Cory was involved in a wide range of experiences from White House Communications and meeting the President to concerts at various venues in Las Vegas and working with some of his personal musical idols.

Most recently, he spent five years of his career at PRG as a Production Manager coordinating crew, equipment, and logistics with customers and executing full-scale concert productions. He finds his production and management experience has proven to be very useful in the permit and real estate world.

Cory lives with his wife Miramonee and daughter Eleanor. Miramonee is a full time wife and mother, and Eleanor attends Children’s House toddler school. During their spare time the family enjoys sailing, home projects, exploring the island and getting involved in community programs.

To learn more, visit Cory’s bio page. And remember to stop by the office and say “hey!”

County Update

Progress on Shoreline Master Program

The County Department of Community Development presented an update on the Shoreline Master Program to San Juan County Council earlier this month. The update answered a number of questions posed by council members and made several recommendations. Then, the council went to work to draft what the public process will look like for the Shoreline Master Plan Update.

The first public hearing on the Shoreline plan is tentatively scheduled for Monday, Nov. 30 in County Council Chambers in Friday Harbor. The public hearing is tentatively set to continue on Wednesday, Dec. 2. at the same location. After deliberations, the council anticipates taking final action at its meeting on Tuesday, Dec. 15.

Colin Maycock, county planner, said that following the council’s action, the Shoreline Master Program will be submitted to the Washington Department of Ecology (WDOE) for review and adoption. WDOE’s adoption process will include at least one public hearing in the county, and it is likely that WDOE will hold more than one public hearing.

Only after WDOE has completed its adoption process, does the approved Shoreline Master Program become effective.

Eastsound Subarea Plan to be Finalized

Revisions made in the Eastsound Subarea Plan have been reviewed by the County Prosecuting Attorney and the format of the draft ordinance is being refined right now.

Colin Maycock, county planner, has developed a tentative schedule, which includes posting of the draft ordinance and staff report online by Wednesday, Nov. 4. A special meeting of the county council and public hearing is tentatively set for Tuesday, Dec. 8 at the Eastsound Fire Station. Following deliberations, the council anticipates taking final action at its December 15 meeting.

Permit Applications

By the end of the third quarter of this year, San Juan County received 138 building permit applications, 20 more than the 118 applications filed in the first three quarters of 2014. In that same time period, San Juan County issued 421 building permits. In comparison, 391 building permits were issued during the first three quarters of 2014.

Permit Resources handles many types of permit applications, and in just the first three quarters of 2015, we filed the same number of permit applications as we did for the entire year of 2014.

Most applications filed by Permit Resources were for building permits and vacation rentals. Here is the breakdown:

30% – Building Permits

30% – B&B/Vacation Rentals

15% – Land Use

5% – Mooring Buoy

2.5% – Forest Practice

17.5% – Misc. & Consultations, etc.

If you have any questions about permit applications, we’re available to help at Permit Resources. Be sure to contact Cory Harrington if you need help preparing your permit package. Call 360-376-8374 or send Cory an email.

Waterfront Rental Available

Do you know someone who’d like to try out Orcas Island in the quiet season? We have a beautiful furnished beachfront home on 8-plus acres between Westsound and Deer Harbor available through April 30, 2016. Cost is $2,700 per month including utilities. This home is south-facing, bright and airy for the winter! Contact Sandi Friel at sandi@twilliamsrealty.com or call 360.298.5180.

Happening this Fall on Orcas

With the second annual Orcas Island Film Festival (October 9-12) freshly wrapped up with rave reviews, it’s time to look ahead to some fun events and activities that will take us from Fall into the busy holiday season of 2015:

Contact us:

Orcas Times

Don't miss an issue: subscribe to Orcas Times. Get the latest stats and personal commentary on our local real estate market, plus information on our ever-changing county building regulations. And, on the lighter side, we share a personal story about life on the rock. And we only publish about three times a year, so it won't fill your inbox.
To subscribe via email, just fill out this short form.